Pakistan tries a new way to pay for a dam: Crowdsourcing

The area where the Diamer-Bhasha Dam would be built over the Indus River in Gilgit-Baltistan, Pakistan, Aug. 2018. The government is asking Pakistanis at home and abroad to help fund the project. (Danial Shah/The New York Times)

Housing being built for workers on the proposed Diamer-Bhasha and Mohmand Dams in Chilas, Pakistan, Aug. 2018. Construction of the dams has yet to begin, and even the most optimistic estimates say they won’t be functional for at least a decade. (Danial Shah/The New York Times)

Pav Akhtar is not one to fall for TV donation ads. In fact, he says, he and his siblings jokingly chide their mother for watching them on Pakistani satellite channels at their home in Lancashire, England.

But when he saw the call on a Pakistani news show for overseas Pakistanis to donate to a new fundraising initiative, he wired his money without hesitation.

“It’s not a generic begging bowl,” said Akhtar, 40. “It’s a specific demand for a specific outcome, and that motivates me.”

Akhtar was not donating to a charity, though. He was giving money to the government.

The financially strapped Pakistani state is running a crowdsourcing-style campaign in a last-ditch effort to secure $14 billion to build two dams, which officials say will solve the country’s endemic shortages of water and electricity. It has become the cause du jour for Pakistanis both at home and abroad.

Television news shows regularly feature the day’s biggest donors handing over their paychecks en masse, including the national soccer team, Pakistani politicians, government employees and members of the military.

Radio ads across the country implore average citizens to donate even 10 rupees (less than 10 cents) over the phone. Pakistani celebrities have announced their own hefty donations on social media and made fundraising appeals to their fans.

This week, Chief Justice Mian Saqib Nisar, who created the fund, berated the television channel Geo News in the Supreme Court for not donating “a single penny” to the dam project.

“Did Geo group hold a marathon transmission for dam funds?” he said. “Geo has not taken the lead over the dam issue even though it is the biggest of all channels.”

To allow for smoother overseas money transfers, the State Bank of Pakistan has even authorised the use of a service owned by PayPal, potentially opening the way for PayPal itself to enter one of the few countries where it is banned.

That new openness reflects the gravity of Pakistan’s financial situation as the government grasps for funding wherever it can. The country faces a balance-of-payments crisis, with a record $18 billion current account deficit for the last fiscal year.

Housing being built for workers on the proposed Diamer-Bhasha and Mohmand Dams in Chilas, Pakistan, Aug. 2018. Construction of the dams has yet to begin, and even the most optimistic estimates say they won’t be functional for at least a decade. (Danial Shah/The New York Times)

On Tuesday, Pakistan announced that it had secured a $6 billion assistance package from Saudi Arabia to help with the crisis. About half the assistance will be deposited at Pakistan’s central bank, to shore up the country’s dwindling finances — it has only enough cash left to cover about two months of imports — while the remaining $3 billion will be a deferred oil payment owed to the Saudis in three years.

With Pakistan still discussing a possible multibillion-dollar bailout from the International Monetary Fund, the Saudi assistance is likely to lower the amount requested. And Pakistan has already received several billion dollars in emergency loans this year from China, its major regional ally.

Other doors were closed this year when the United States froze aid and Pakistan was returned to an international financial “grey list,” in both cases over concerns that Pakistan was not doing enough to combat terrorist groups operating on its soil.

With few options left, the government is going directly to the people.

The dam project would seem an unlikely way to galvanise Pakistanis, who in recent years have grown weary of corruption scandals and crumbling public services. Construction of the dams has yet to begin, and even the most optimistic estimates say they won’t be functional for at least a decade.

But Imran Khan, the new prime minister, is no stranger to fundraising or sunny rhetoric. He spent years in the 1980s and ‘90s raising money to build a world-class cancer hospital for the poor in Lahore, which he often cites as proof of his resolve.

“I am the greatest fundraiser in the history of Pakistan,” he said last month. “We can build dams in five years if the donations continue.”

Khan and his government have created a sense of urgency around the project, known as the Diamer-Bhasha and Mohmand Dams, spawning social media discussions and news debates that cast the dams as pivotal for Pakistan’s future.

On Sept 8, Khan appealed on television to the 9 million Pakistanis living abroad, asking them to give at least $1,000 each. As of Oct. 8, they had donated about $3 million, including more than $300,000 from the United States.

That is a small fraction of the $48 million raised since the government opened a bank account for donations in July, which itself is less than 1 percent of the dams’ total estimated cost of $14 billion. A Pakistani television network noted last month that at the current rate, funding the dam would take 120 years.

Foreign lenders could speed up the process, but many of them, like the World Bank and the Asian Development Fund, have been reluctant to participate, despite more than a decade of campaigning by previous governments. Minor pledges from allies like Japan haven’t been enough to close the gap.

China sought to fund the dams as part of the China-Pakistan Economic Corridor, its $62 billion plan to invest in Pakistani infrastructure in exchange for securing new trade routes. But its onerous terms, under which the Chinese would essentially own the dams themselves, kept Pakistan from including the dam project in the broader deal.

Though the move signalled Pakistan’s growing concern over its indebtedness to China, it means the dam project has no major foreign lender. Without such backing, the full $14 billion needed to complete it is woefully out of reach.

But critics say that even if the money is raised, the dams won’t be the silver bullet the Pakistani government would have donors believe.

“Because the dams are a big project, there’s been a lot of hype created around it and people in the government want to get some political mileage from it,” said Hassan Abbas, a hydrologist who has worked to address water shortages in Pakistan for more than two decades.

Abbas said Pakistan’s water shortages stemmed from the outdated irrigation system left over from the British colonisers, which in many areas is more than 100 years old. An expensive dam project can’t fix the problem when it lies downstream, he said.

The repeated calls to donate, though, drill home the same message: Pakistan needs the dams to survive.

As for the donors — average citizens and Pakistanis abroad who have handed over their money without stipulations — the unlikelihood of the project’s success isn’t a deterrent.

Akhtar, the donor in Lancashire, England, said he did not regret his decision. Endlessly debating the merits of the dams will only leave Pakistan where it has always been, he said: “It’s like arguing while Rome burns.”